Ambidextrous leadership in the innovation process Rosing, Kathrin; Frese, Michael; Rosenbusch, Nina

Ambidextrous leadership in the innovation process Rosing, Kathrin; Frese, Michael; Rosenbusch, Nina Published in: Innovation and international corporate growth DOI: 10.1007/978-3-642-10823-5_12 Publication date: 2010 Document Version Early version, also known as pre-print Link to publication Citation for pulished version (APA): Rosing, K., Frese, M., & Rosenbusch, N. (2010). Ambidextrous leadership in the innovation process. In Innovation and international corporate growth. (pp. 191-204). Heidelberg: Springer-Verlag. DOI: 10.1007/978-3- 642-10823-5_12 General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. Users may download and print one copy of any publication from the public portal for the purpose of private study or research. You may not further distribute the material or use it for any profit-making activity or commercial gain You may freely distribute the URL identifying the publication in the public portal? Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Download date: 04. Dec. 2017

Ambidextrous Leadership in the Innovation Process Kathrin Rosing, Nina Rosenbusch, and Michael Frese Contents 1 Introduction... 191 2 Ambidexterity... 192 3 An Example of an Ambidextrous Organization... 194 4 The Innovation Process... 195 5 Leadership in the Innovation Process... 196 6 Ambidextrous Leadership: The Behavioral Flexibility of Leaders... 198 7 How to Become an Ambidextrous Leader?... 200 8 Conclusion... 202 References... 202 1 Introduction Innovation research is full of paradoxes. Bledow, Frese, Anderson, Erez, and Farr (2009) summarize several kinds of conflicting demands inherent to the innovation process and demonstrate the commonness of tensions within this process. The main paradoxes of innovation are probably achieving a balance of new and old activities, of structured and chaotic activities, and of uncertain and reliable activities. All these activities map onto ambidexterity the ability to achieve a balance of exploration and exploitation. In this chapter, we will argue that ambidexterity is required within the innovation process, not only on the organizational level but also for each individual person involved in an innovation process. Leaders in the context of innovation need to be able to support subordinates in their attempts to act ambidextrously by ambidextrous leadership. We will begin this chapter by explaining the concept ambidexterity and illustrating its application in one highly innovative company. Afterwards we will demonstrate its importance within the innovation process. Subsequently we will K. Rosing (B) University of Giessen, Giessen, Germany e-mail: kathrin.rosing@psychol.uni-giessen.de A. Gerybadze et al. (eds.), Innovation and International Corporate Growth, DOI 10.1007/978-3-642-10823-5_12, C Springer-Verlag Berlin Heidelberg 2010 191

192 K. Rosing et al. give a short overview of the existing literature on leadership and innovation. We will conclude by introducing the term ambidextrous leadership and explaining the importance of this concept for the innovation literature and practice. 2 Ambidexterity Ambidexterity literally means the ability to use both hands equally well. In management science the label ambidexterity has been linked to the balance of explorative and exploitative organizational strategies, i.e. the ability to engage in exploration and exploitation equally well. 1 Exploration and exploitation were originally defined by March (1991) as two different forms of organizational learning. In this respect, exploration is connected to increasing variance, experimentation, search for alternatives and risk taking. In terms of innovation, exploration is linked to radical innovation, entering new product markets and new technology. On the other hand, exploitation is linked to reducing variance, adherence to rules, alignment and risk avoidance. In the innovation context, exploitation means rather implementation, incremental innovation and refinement of existing products. Both exploration and exploitation have their benefits and their costs. For example, exploration may lead to radically new products, but the success of these products may be very uncertain. The outcome of exploitation in turn is rather predictable, but will be unlikely to lead to competitive advantage in the long run. Thus, for firms to be successful in the short and also the long run it is necessary to be both explorative and exploitative i.e. to be ambidextrous. Several studies already have shown that organizations that are able to achieve a balance of exploration and exploitation are more successful than organizations that do not achieve such a balance. 2 Raisch and Birkinshaw (2008) reviewed the literature on ambidexterity and its different connotations. They conclude that ambidexterity is not limited to the balance of exploration and exploitation, but also refers to several other pairs of contradictory concepts, e.g. incremental vs. radical innovation, continuity vs. change, induced vs. autonomous organizational strategies, and organic vs. mechanical organizational structures. Thus, the central feature of organizational ambidexterity is the integration of conflicting or even contradictory activities, strategies or features. Gupta, Smith, and Shalley (2006) discuss several possibilities of handling the contradictory explorative and exploitative organizational strategies. They argue that it is important to be clear about the question whether exploration and exploitation are actually mutually exclusive (i.e., two ends of a continuum), or whether exploration and exploitation are two orthogonal dimensions (i.e., theoretically independent). In the first case, an organization may be more explorative or more exploitative and a balance of exploration and exploitation would be the middle of the continuum. In the latter case, an organization may be more or less explorative and more or 1 Bledow et al. (2009). 2 For example He and Wong (2004).

Ambidextrous Leadership in the Innovation Process 193 less exploitative and, for greatest success, organizations should be high on both exploration and exploitation. Gupta et al. further derive two different mechanisms to achieve an organizational level balance of exploration and exploitation from the conceptualization of exploration and exploitation as either a continuum or as orthogonal dimensions. They argue that a temporal separation of exploration and exploitation makes sense in the case of a continuum, i.e., a temporal shift alongside the dimension from exploration to exploitation and vice versa. In contrast, they suggest that a structural separation of exploration and exploitation is superior in the case of orthogonal dimensions. Structural separation equates the concept of structural ambidexterity as defined by Benner and Tushman (2003). Structural ambidexterity is achieved by dual structures, i.e., separate units that are specialized in either exploitation or exploration. The two mechanisms proposed by Gupta et al. (2006) have in common the separation of exploration and exploitation on an organizational level (either temporal or sturctural). However, we suggest that exploration and exploitation can be integrated into a complex strategy, following the reasoning of Bledow et al. (2009) that exploration and exploitation might be perceived as thesis and antithesis that can be integrated into a higher order synthesis that combines aspects of both. To understand the interplay of exploration and exploitation, it is important to have a deeper look at the organization. The concept of ambidexterity has been developed for the organizational level. But what ambidexterity actually means on lower levels of an organization especially in behavioral terms for teams and individuals has not yet been elaborated in the existing literature. We argue that exploration and exploitation are interwoven activities that cannot be separated. For example, in highly innovative R&D teams, explorative activities are doubtlessly very important. But even those R&D teams would not be able to produce any results without exploiting their existing competencies and relying on well-learned routines. Therefore, individuals and teams need to able to both explore and exploit and additionally integrate both activities for meaningful behavior to take place. That is, an individual switching from exploration to exploitation and vice versa needs to integrate both activities within an overall plan to be able to reach his or her goals. We argue that the either-or-logic of separating exploration and exploitation (whether leading to temporal or structural separation) may be a reasonable strategy on the organizational level. But on lower levels we do not think that exploration and exploitation can be completely separated. Working in a unit that is specialized in exploitation does not mean that absolutely no exploration activities are needed. In turn, working on mainly exploratory tasks does not imply that no routine or exploitative activities are appropriate at all. Therefore, we propose that a both-and-logic, 3 i.e., an integration of exploration and exploitation, is a more reasonable strategy on lower levels of the organization. Similar to this idea, Gibson and Birkinshaw (2004) introduced the concept of contextual ambidexterity. Contextual ambidexterity implies that the individuals of 3 Lewis (2000).

194 K. Rosing et al. an organization have to engage in both exploration and exploitation and management systems are designed in such a way that individuals are able to decide by themselves when to use which kind of activity. Ambidexterity needs to be already incorporated in the organizational context in such a way that it is conducive to both exploration and exploitation. 3 An Example of an Ambidextrous Organization At this point, we would like to illustrate our arguments by analyzing one of the most successful ambidextrous organizations: the Toyota Motor Corporation. In Business Week s 2009 ranking of the 25 top innovative companies, Toyota ranks third after Apple and Google and thus appears to be the most innovative non-it company. Over the past few decades, Toyota has managed to become the leading automotive company in the world using a variety of different measures. Until the recent global financial crisis hit companies worldwide, Toyota had never reported an operating loss in its history. The company s products were often rated as the best with respect to quality, and Toyota s market share has risen dramatically. Researchers and practitioners have frequently asked what it is that makes Toyota so successful. Whereas the Toyota Production System has often been viewed as the reason for success, Takeuchi, Osono and Shimizu (2008) argue that Toyota s unique strength is the ability to deal with contradictions embedded in a corporate culture that facilitates continuous improvement (kaizen) and radical change (kaikushin) at the same time. In an interview with Thomas Stewart and Anand Raman, Katsuaki Watanabe, the president of Toyota stated: Fifteen years ago I would have said that as long as we had enough people, Toyota could achieve its goals through kaizen. In today s world, however, change can be produced by kaizen, but it may also need to be brought about by kaikushin. When the rate of change is too slow, we have no choice but to resort to drastic changes or reform: kaikaku. 4 Dealing with the contradictory tasks of exploitation and exploration requires a unique organizational setting. Thus, in order to learn from Toyota, one needs to identify factors that enable the company to be ambidextrous. Toyota s corporate culture is characterized by a high tolerance for failure that fosters radical change. The company s leaders set impossible goals to create breakthrough innovations. 5 At the same time, the deeply embedded respect for people, one of the pillars of the Toyota Way (in particular the Customer First principle), encourages continuous improvements. The regional strategy of Toyota also aims to serve the contradictory demands of radical and incremental change. Whereas Toyota utilizes the home market for experimentation, its local customization strategy for 4 Katsuki Watanabe in Stewart and Raman (2007, p. 81). 5 Takeuchi, Osono, and Shimizu (2008).

Ambidextrous Leadership in the Innovation Process 195 international operations facilitates incremental improvements of products and processes and especially aims at increasing efficiency. 6 A third factor that enables Toyota to manage the contradictory tasks of exploration and exploitation relates to human resources. The unique combination of a strict hierarchical structure with freedom in employee s decision-making facilitates both exploration and exploitation. Information flows freely across hierarchical levels and functions leading to a diffusion of knowledge in all directions 5. Employees are encouraged to participate in networks to generate even more knowledge. Toyota also encourages employees to challenge current state of the art and find solutions for problems 5. Even first-line employees are part of the innovation process. 7 Toyota heavily invests in improving the capabilities of their employees at all levels and functions. In addition, the company trains managers to become T-type people. T-type managers intensify their knowledge in their own area while at the same time learning other jobs. It takes Toyota up to 20 years to train T-type managers. 8 Perhaps most importantly, Toyota sticks to its long-term focus. There are no deadlines for innovation projects. The idea of a never-give-up culture leads to continuous improvements and revolutionary change at the same time. After introducing the general concept of ambidexterity and explaining its application in a highly successful organization, in the next section we will now describe the meaning of ambidexterity within the innovation process. We will argue that for being innovative, it is important to be ambidextrous and act ambidextrously. 4 The Innovation Process West and Farr (1990) define innovation as the intentional introduction and application within a role, group or organization of ideas, processes, products or procedures, new to the relevant unit of adoption, designed to significantly benefit the individual, the group, organization or wider society (p. 9). Thus, to be innovative it is not enough to be just creative. Creative ideas need to be implemented to create value for the organization. Following this idea, the innovation process can be split up in two rough stages: the creativity stage and the implementation stage. 9 The creativity stage includes the identification of a problem or an opportunity and the generation of ideas to solve the problem or use the opportunity. To be creative, explorative behavior as defined by March (1991) is necessary. The implementation stage compromises the evaluation of the generated ideas, the selection of one or more ideas, and finally the actual implementation of the idea/s. 6 Stewart and Raman (2007). 7 Hamel (2006). 8 Watanabe in Stewart and Raman (2007). 9 Farr, Sin, and Tesluk (2003).

196 K. Rosing et al. To implement ideas, it is necessary to exploit. The distinction between the creativity and implementation stage of innovation is widely accepted in the literature. High performance in the creativity and implementation stages of innovation should be fostered by very different conditions, i.e., conditions that stimulate explorative and exploitative activities respectively. Research has shown that for creativity, intrinsic motivation, a divergent thinking style and autonomy are important antecedents. In contrast, implementation is predicted not as much by individual variables, but more by variables that reside on higher organizational levels, such as management support and organizational support for innovation. What makes innovation a really challenging endeavor is that the creativity stage and the implementation stage cannot be clearly separated. Rather, the innovation process is chaotic and nonlinear. 10 That means creativity and implementation are not bound to specific phases but are needed throughout the whole innovation process. Therefore, exploration and exploitation are needed not only in specific phases but also within the whole process. For this reason, individuals and teams need to be able to switch between these two kinds of behaviors. Thus, as we argued before, ambidexterity is necessary in the innovation process. We suggest that it is an important question to ask how this balance of exploring and exploiting may be best achieved within the innovation process since, for the individual employee or for the individual work group, ambidexterity means balancing behaviors that are quite different. Below, we will discuss possibilities of how leaders can support their subordinates in their attempts to achieve ambidexterity in the innovation process. To this end we will now give a short overview on the existing literature on leadership and innovation to see what we already know about the influence of leaders within the innovation process. 5 Leadership in the Innovation Process The link between leadership and innovation has attracted increasing attention in the literature. In fact, some researches argued that leadership is one of the most important predictors of innovation. 11 Transformational leadership. Transformational leadership has been defined as moving the follower beyond immediate self-interests through idealized influence (charisma), inspiration, intellectual stimulation, or individualized consideration. 12 Thus, transformational leadership motivates people to reach higher goals beyond the primary work task. Transformational leadership is by far the most frequently studied leadership behavior in the innovation context. However, the literature on the relationship of transformational leadership with innovation and creativity does not yield a consistent picture. Some studies did find a positive relationship, but others 10 For example Anderson, De Dreu, and Nijstad (2004). 11 Mumford, Scott, Gaddis, and Strange (2002). 12 Bass (1999, p.11).

Ambidextrous Leadership in the Innovation Process 197 did not find such a relationship. A few studies even reported a negative relationship. More likely than not, the relationships between transformational leadership and creativity/innovation are contingent on other variables, such as the type of dependent variable (e.g., creativity vs. innovativeness), the level of analysis, the work tasks (e.g., research vs. development projects) and the several features of the individuals, teams and organizations studied (e.g., climate for excellence, centralization, etc.). Nevertheless, it appears to be difficult to draw clear conclusions from the existing results on the transformational leadership creativity/innovation link. We suggest that the particular nature of innovation processes calls for more situational leadership behaviors rather than for the broad cluster of stable leadership behaviors such as transformational leadership. We will outline this approach in more detail later in this chapter. Transactional leadership. In contrast to transformational leadership, transactional leadership establishes an exchange-based relationship by clarifying goals and rewarding goal achievement and by intervening only when necessary. 13 Very few studies have looked at the relationship between transactional leadership and creativity/innovation. Experimental studies suggest a positive relationship. However, a field study by Jansen and colleagues 14 showed a positive relationship of transactional leadership with exploitative innovation, but a negative relationship with explorative innovation. Thus, no simple conclusion may be drawn from the existing results concerning the transactional leadership innovation/creativity link. Initiating Structure. Initiating structure is defined as leader behavior that structures tasks, defines goals and controls goal attainment. 15 Unfortunately, only a few studies have been done on the relationship between initiating structure and innovation. The scarce evidence suggests that initiating structure has a positive relationship with performance in R&D teams, i.e., innovation, especially when the innovation is incremental rather than radical. 16 Consideration. Consideration 15 is the concern and respect of the leader for subordinates feelings and the leader s appreciation and support of subordinates. To our knowledge, only one study has analyzed the relationship between consideration and innovation. Keller (1992) found a positive relationship between consideration and performance in R&D teams. Leader-Member Exchange. In contrast to the above mentioned leadership styles that describe overall leader behaviors, leader-member exchange (LMX) focuses on the leader-follower dyad and the quality of this relationship. 17 High-quality exchange relationships are characterized by mutual trust and respect. Leadermember exchange has been studied several times on the individual level. Apart from a few exceptions, the literature on LMX and innovation is quite consistent 13 Bass (1999). 14 Jansen, Vera, and Crossan (2009). 15 Fleishman (1953). 16 Keller (2006). 17 Graen and Uhl-Bien (1995).

198 K. Rosing et al. in the result that a high quality leader-member exchange has a positive relationship with innovation. Supervisor support. Supervisor support is not a clearly defined leadership style, but rather a cluster of leader behaviors that are supportive of subordinates innovative behaviors. Supervisor support has been studied quite frequently in the innovation context. About half of these studies show a small, but significant positive relationship of supervisor support and creativity/innovation. However, nearly as many studies did not find such a relationship. The results suggest that supervisor support is more important for actually acting on ideas (i.e., implementation) rather than just having ideas (i.e., idea generation). This may be due to the fact that the implementation of ideas is more of a social process that involves other persons than idea generation that can be more easily kept to the individual. Therefore supervisor support may be more helpful when it comes to selling and actually acting on ideas. Summary and conclusions. It seems to be difficult to draw clear conclusions from the existing literature on the leadership creativity/innovation link. Very different and even opposing leadership behaviors are important for the innovation process. At the same time, the same leadership behaviors are in some studies related to innovation, but in others they are not. We suggest that the traditionally studied leadership behaviors such as transformational leadership and initiating structure may be too general to accurately predict innovativeness. In addition, the specific conditions under which leadership behaviors are successful have to be outlined, i.e., research has to look for moderating conditions. Therefore, a contingency theory that is able to explain what specific leadership behavior is effective in which situation and that additionally considers the particularities of the innovation process is called for. 6 Ambidextrous Leadership: The Behavioral Flexibility of Leaders It seems to be very unlikely that relatively stable and broad clusters of leadership behaviors such as transformational leadership or initiating structure are suitable for predicting very variable and specific behaviors such as exploration and exploitation. We argue that for a reliable prediction we need equally variable and specific behaviors on the leadership side. That is, the best way to predict specific follower behavior is to predict it by specific leader behavior. Therefore, we will introduce two sets of leader behaviors that we suggest for predicting exploration and exploitation respectively. A good way to characterize the leadership behaviors needed for exploration might be the term opening. To foster idea generation and exploration, the leader needs to create an open atmosphere. One prerequisite of being creative is the increase of variance. Diversity and different approaches lead to creativity. For being explorative, employees need to know that they are not only allowed but are actually required to experiment and play with ideas. Opening leader behaviors encourage employees to break up rules and search for solutions outside the safe ground. They

Ambidextrous Leadership in the Innovation Process 199 also allow for different approaches to work. And opening leader behaviors mean being critical of the ways things have been done in the past. Thus, we define opening 18 as a set of leader behaviors that includes encouraging doing things differently and experiment, giving room for independent thinking and acting, and supporting attempts to challenge established approaches. In contrast, when it comes to leadership and exploitation, closing might describe the necessary leader behaviors quite well. When implementing ideas, the reduction of variance is crucial. Employees need to be in line and adhere to rules as errors and failures must not be risked in this stage of the process. Exploiting means reliance on well-trained competencies and being efficient in acting. Closing leader behaviors mean establishing routines that subordinates have to follow and giving exact instructions how to carry out tasks. In addition, they mean defining specific work goals and pre-structuring tasks. Thus, we define closing 19 as a set of leader behaviors that includes taking corrective action, setting specific guidelines and monitoring goal achievement. We argued earlier that to be innovative, it is not enough to be able to explore and exploit, but it is also necessary to switch flexibly between the two kinds of behaviors. For leaders, this means that they need to be not only able to show opening and closing leader behaviors, but they need to be able to flexibly switch as well. In conclusion, what we describe as an ambidextrous leader 19 is a leader that is able to foster exploration by opening behaviors and exploitation by closing behaviors and flexibly switch between these behaviors according to situational and task demands. Figure 1 summarizes our theoretical model of ambidextrous leadership. In the example of Toyota earlier in this chapter we already learned about ambidextrous leaders. Toyota s leaders are able to foster both radical change and incremental improvements, thus, exploration and exploitation. The description of Toyota s characteristics includes hints for opening and closing leader behaviors. The high tolerance for failure that is embedded in the company s culture encourages leaders to show opening leader behaviors. Strict hierarchies lead to closing leader Fig. 1 Theoretical model of ambidextrous leadership 18 Rosing and Frese (2009). 19 Ibid.

200 K. Rosing et al. behaviors. The T-type managers are another example for ambidextrous leaders as they are trained to both exploit their existing knowledge within their own job and explore new knowledge in different areas. A more detailed analysis of the organization would be necessary to make specific leader behaviors visible. Nevertheless, the description of Toyota gives an indication of organizational level characteristics that are supportive of ambidextrous leadership. An approach to leadership in the innovation process similar to ambidextrous leadership has also been taken by Van de Ven, Polley, Garud, and Venkataraman (1999). On the organizational level, they distinguish four top management leadership roles that they find are important in the innovation journey : the sponsors who champion an innovation, the mentors who coach and supervise the innovation team leader, the critics who test the innovation against hard business criteria, and the institutional leaders who balance the power of the other three leadership roles. In the innovation projects Van de Ven et al. studied, these roles were contrary to assumptions not accomplished by different persons, but individual members of the top management carried out several of these roles. Thus, managers need to be able to carry out more than one leadership role and must be able to switch between them. For example, a manager supports an innovation project by gathering resources and at the same time takes on the role of a critic questioning the progress and the success of the project. Paradoxical use of different leadership styles or roles (e.g., as sponsor and critic) therefore seems to be necessary for innovation success. Van de Ven et al. claim that the odds of organizational learning and adaptability increase when a balance is maintained among dialectical leadership roles throughout the innovation development. In contrast to Van de Ven et al. (1999) we do not propose distinct leadership roles that need to be balanced within the innovation process, but rather specific leadership behaviors that foster exploration and exploitation namely opening and closing leader behaviors as defined above. The advantage of our approach is that these leader behaviors are more specific on the one hand and more flexible to be used on the other hand. Roles generally include a broader cluster of behaviors and are rather stable and inflexible. As we argue that flexibility and situational adaptability are the most important features of an ambidextrous leader, we suggest concentrating on leadership behaviors rather than leadership roles. 7 How to Become an Ambidextrous Leader? The next important question is: How might a leader achieve being an ambidextrous leader? We argue that there are two main routes to ambidextrous leadership. First, leaders may directly influence their subordinates behavior by opening and closing leader behaviors. For this strategy, we need to know what the prerequisites are to do so. Second, leaders may instead indirectly influence their subordinates in establishing a culture or climate that is beneficial for both exploration and exploitation. Thus, we need to know what kind of culture or climate might be suitable. In the following paragraphs we will elaborate both routes to ambidextrous leadership in more detail.

Ambidextrous Leadership in the Innovation Process 201 Zhou and George (2003) argue that emotional intelligence enables leaders to understand and channel the emotions of subordinates connected to the innovation process. Emotional intelligence therefore might be helpful to be sensitive to what kind of leader behaviors are called for in a given situation. A leader with high emotional intelligence might be able to have an intuition for what kind of behavior his or her subordinates need to show and be able to adapt his or her leader behavior appropriately. For example, when an individual generates a lot of ideas of how to solve a problem it might be necessary for a leader to find the right point in time to intervene before this individual gets overwhelmed by too many ideas, but not before enough useful ideas have been generated. Emotional intelligence should enable a leader to find this right point in time. Another more cognitive prerequisite for being an ambidextrous leader might be the ability of integrative thinking. In his book The Opposable Mind, Martin (2007) gives several examples of leaders capable of integrative thinking. These leaders have in common that they are able to simultaneously hold in mind two contradictory ideas. Leaders who are convinced that exploration and exploitation or opening and closing leader behaviors are not mutually exclusive, but are able to combine and integrate both into a higher order plan should be able to foster both exploration and exploitation and to frequently switch between opening and closing leader behaviors. The second route to ambidextrous leadership is a more indirect way of fostering both exploration and exploitation in subordinates by influencing the organizational and team culture. That means, a leader may establish an organizational or team culture that is beneficial for both explorative and exploitative activities. We propose a climate for initiative 20 to be helpful in advancing ambidexterity. Personal initiative is a self-starting, proactive, and persistent approach to work. Climate for initiative fosters such an approach to work. Personal initiative is positively linked to exploration 21 as the self-starting and proactive approach motivates individuals to search for new possibilities of accomplishing tasks. Being persistent helps to overcome barriers that frequently arise within the innovation process. On the other hand, personal initiative also fosters exploitation, as it encourages individuals to use their existing knowledge to continuously improve their work on a self-starting, proactive and persistent base. Thus, establishing a climate for initiative is supportive of innovation in fostering both exploration and exploitation, i.e., ambidexterity. In addition, an error management culture 22 should be favorable for both exploration and exploitation. An error management culture combines the acknowledgement of the positive consequences of errors and the prevention of the negative consequences of errors. An organization or team with a high error management culture is able to utilize the diversity errors can create for exploration. It is also able to avoid the negative consequences of errors in quickly responding to errors in exploiting existing knowledge about handling errors. 20 Baer and Frese (2003). 21 Frese, Teng, and Wijnen (1999). 22 Van Dyck, Frese, Baer, and Sonnentag (2005).

202 K. Rosing et al. Thus, to conclude, we suggest there are two main routes that ambidextrous leaders may use to positively influence the innovation process. The first route is to directly influence the exploration and exploitation activities of subordinates by combining opening and closing leadership behaviors. For being able to do so emotional intelligence and integrative thinking may be conducive. The second route is to indirectly influence subordinates by affecting the organizational or team climate by establishing an error management culture and a climate for initiative. The two routes complement each other in their influence on ambidexterity. 8 Conclusion Leadership in the innovation context is complex. This is due to the fact that innovation itself is complex as it demands very different activities, i.e., exploration and exploitation. Unfortunately, the innovation process cannot be easily split into distinct stages, but is rather nonlinear and difficult to predict. Leaders of an innovative workforce need to be able to deal with this complexity by ambidextrous leadership. We argued that established concepts of leadership cannot explain subordinates performance in the innovation process, as these concepts are too broad to predict specific explorative and exploitative behaviors. Therefore, we introduced two sets of leader behaviors that directly foster exploration and exploitation: opening and closing leader behaviors respectively. We called the flexible application of these leader behaviors according to situational and task demands ambidextrous leadership. Leaders willing to achieve ambidextrous leadership may use two different routes: first, by directly influencing their subordinates in interaction and, second, by indirectly influencing the organizational culture and climate to support ambidexterity. Doubtlessly, ambidextrous leadership is not easy to achieve. But given the importance of innovation for organizational success and viability, it is an objective worth pursuing. Acknowledgments This research was supported by a research grant by the Volkswagen Foundation (II/82 408). We would like to thank our colleagues Andreas Bausch, Nataliya Baytalskaya, Ronald Bledow, James Farr, Verena Mueller, Alexander Schwall, and Shaker Zahra for discussions on initial ideas from which this chapter emerged. References Anderson, N. R., De Dreu, C. K. W., & Nijstad, B. A. (2004). The routinization of innovation research: A constructively critical review of the state-of-the-science. Journal of Organizational Behavior, 25(2), 147 173. Baer, M., & Frese, M. (2003). Innovation is not enough: Climates for initiative and psychological safety, process innovations and firm performance. Journal of Organizational Behavior, 24(1), 45 68. Bass, B. M. (1999). Two decades of research, and development in transformational leadership. European Journal of Work and Organizational Psychology, 8(1), 9 32.

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